Victoria's Secret shares surged about 40 percent in premarket trading Tuesday after the company posted first-quarter earnings that nearly doubled what Wall Street had expected and raised its full-year sales guidance by more than $180 million.
The company reported adjusted earnings of 60 cents per share on revenue of $1.56 billion for the fiscal first quarter ended May 2. Analysts had expected 30 cents per share on $1.52 billion in revenue, according to LSEG. Net income for the quarter came in at $47.7 million, or 56 cents per share.
According to CNBC, CEO Hillary Super said growth was broad across every part of the business. "Very consistent, double-digit [sales] increases across Victoria's Secret, Pink, beauty channels, digital, stores and international, all very positive," Super said in an interview. "Supercharging bras being one of our most important initiatives, double-digit [comparable sales growth] there, and I think the loyalty that bras creates and the anchor that it is in the business is just so important."
Super also said the company grew sales with significantly fewer promotions and gained market share during the quarter, particularly with shoppers ages 18 to 24.
The company now expects full-year sales of between $7.03 billion and $7.13 billion, up from a previous range of $6.85 billion to $6.95 billion, and ahead of analyst estimates of $6.99 billion. Full-year adjusted operating income guidance was raised by more than $100 million, to a range of $550 million to $580 million, compared to a prior range of $430 million to $460 million.
Chief Financial Officer Scott Sekella pointed to several factors behind the raised guidance. He cited stronger-than-expected sales, which improved leverage on fixed costs, and lower tariff costs following court rulings that struck down many of President Donald Trump's sweeping import duties. "All of this is predicated on the Q1 that we had, the momentum we see into Q2 and how we feel about our back half launches," Sekella said.
Some retailers this season credited stronger-than-usual tax refunds for boosting their results. Sekella acknowledged some Victoria's Secret customers used their refunds to shop, but called it a "normal amount" and said trends have stayed consistent even as tax refund money has dried up for many shoppers.
The company's second-quarter outlook also beat expectations. Victoria's Secret projected second-quarter sales of $1.59 billion to $1.62 billion, ahead of analyst estimates of $1.56 billion. That guidance stands out because several other retailers have issued more cautious near-term outlooks as they watch whether consumer spending holds without the tax refund boost.
